Energy Law Leaves Out Wind, Solar Tax Credits While the new energy bill delivers good news to those in the ethanol business, it disappoints many in the business of cultivating alternative energy sources — such as wind, solar and geothermal power.
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Energy Law Leaves Out Wind, Solar Tax Credits

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Energy Law Leaves Out Wind, Solar Tax Credits

Energy Law Leaves Out Wind, Solar Tax Credits

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As you drive along the roads in Iowa or many other rural communities, in addition to crops and livestock, you may well spot another kind of farm that has little to do with agriculture - wind farms, those vast stretches of land with the towering turbines that generate wind energy. And for those who promote the windustry, the energy bill was a disappointment.

Tom Carnahan is president of the Wind Capital Group, and he joins us now from St. Louis. Hello, Tom.

Mr. TOM CARNAHAN (President, Wind Capital Group): Hi, Michele. Good to be here.

NORRIS: Now, we just spoke to a farmer in Iowa who's stoked about this energy bill and what it means for the biofuel industry. For him, this is a great day. With a stroke of a pen, his future is now brighter. What's your outlook since this bill didn't include or extend those wind and solar tax credits?

Mr. CARNAHAN: Well, I'm very happy over what Congress did to include the energy efficiency in the biofuels. But you just can't have meaningful energy policy in America without addressing the renewables - from the electric renewables, like wind.

NORRIS: It sounds like in pushing - in trying to encourage Congress to extend this tax credit, what those are pushing is - we're hearing was, you know, good idea, just not now. Is this a lost opportunity? And what does it mean to the industry?

Mr. CARNAHAN: Well, it's - not renewing the PTC is a big deal for our industry and also for the economy as a whole. What Congress has done historically is wait until it was just about to expire to renew it. And that's what they've done over and over again. And in 2005, on the other hand, they actually went and renewed it for a two-year period before it was going to expire. And what we saw was a very, very rapid rollout of wind energy all over the country. It was a real high point for our industry. So the longer term extensions really have a dramatic effect.

NORRIS: And you're using a term, though, that our listeners may not be familiar with - the PTC.

Mr. CARNAHAN: The protection tax credit is the lingo we use to refer to this tax credit. For every kilowatt hour of electricity that is produced and sold on to the grid, there is a tax credit that goes to the project entity. The project entity has investors, some of which can use that tax credit to pay their taxes. In exchange for using the tax credit, they put actual cash into the project that allows us to then go borrow money on the private sector.

NORRIS: It basically creates liquidity for you.

Mr. CARNAHAN: That's correct.

NORRIS: Tom, what does this mean - the signing of this bill - what does this mean for someone like you? You're a part of a wind development group. You try to encourage investors to devote funding for this. You also try to encourage farmers to set aside land for turbine use. What does this mean for you?

Mr. CARNAHAN: It will effectively - if Congress does not relook at this and get it renewed here in the next few months, you're going to see wind energy come to a stall all across the United States. And the community that was expecting new tax base and the landowners that were expecting these lease payments - they're not going to be getting them. It's just a real shame. Another impact that this has is that there is a move toward more manufacturing of the equipment, the gigantic wind turbines. And without having certainty, investors aren't going to go fund those new manufacturing jobs.

NORRIS: Tom Carnahan, thanks so much for talking to us.

Mr. CARNAHAN: Thank you.

NORRIS: Tom Carnahan is the president of the Wind Capital Group. He spoke to us from St. Louis, Missouri.

BLOCK: And we also heard from Gregg Heide, a corn farmer in Pomeroy, Iowa, and Professor Daniel Sperling from U.C. Davis. They were talking about the energy bill that President Bush signed into law today.

NORRIS: You're listening to ALL THINGS CONSIDERED from NPR News.

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